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Legal guidance may help with personal bankruptcy filing

California consumers who decide to file for Chapter 7 or Chapter 13 bankruptcy may benefit from obtaining professional guidance instead of rushing into it. Personal bankruptcy filings can become complicated, especially when the same person has also filed for a business bankruptcy. The failure to disclose any financial details can jeopardize the person's chances to be discharged from bankruptcy.

This may be the fate of a woman in another state who filed for personal bankruptcy after also filing a business bankruptcy for a gym that ultimately closed down last fall. The court-appointed trustee reported that the woman stated in the business bankruptcy petition that the gym had not received any loans. However, it came to light that there were three loans from two Internet lending companies.

The trustee also determined that the woman had received several thousands of dollars from the gym during 2015, none of which was declared in the bankruptcy filing. When she filed for personal bankruptcy, the woman stated that her house and a car were her only assets, and her liabilities totaled over $5.6 million. However, the trustee claims that required records were not kept and that the woman could not explain the loss of assets of the gym.

Explaining that she did not have a legal representative, the woman asked the court for a continuance in her response to the trustee's allegations of her making false oaths and the recommendation not to allow discharge in bankruptcy. Having the guidance and support of an experienced bankruptcy attorney might avoid such situations. A California lawyer can explain what information must be disclosed when petitioning for business and/or personal bankruptcy and make sure that nothing is left out. Bankruptcy is an opportunity to have a fresh start, but it must be navigated with the seriousness it deserves.

Source:, "Fraud alleged in bankruptcy", Bruce Rushton, April 7, 2016

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Thomas F. Miles, Attorney and Counselor at Law
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